After a lengthy debate among lawmakers over the best way to regulate services like Uber and Lyft, the Texas House backed a proposal that would override local regulations concerning ride-hailing companies.

State Rep. Chris Paddie, R-Marshall, looks over his notes shortly before vote on HB 100 on April 19, 2017. The bill passed second reading on a 110-37 vote and will impose regulations on transportation network companies statewide if finally passed.
Bob Daemmrich for The Texas Tribune

After a lengthy debate among lawmakers over the best way to regulate services like Uber and Lyft, the Texas House backed a proposal that would override local regulations concerning ride-hailing companies.

House Bill 100, by state Rep. Chris Paddie, R-Marshall, would establish a statewide framework to regulate ride-hailing companies and undo local rules that the two companies have argued are overly burdensome for their business models. Cities enacting such rules say those regulations bring a needed layer of security.

As of mid-morning Wednesday, 79 members in the 150-member House — including Paddie — had signed on to the bill as authors or co-authors.

“HB 100 is not about a particular company or any particular city,” Paddie said Wednesday on the House floor. “Statewide regulations for transportation network companies have become the best practice across the country."

His bill was tentatively approved by the lower chamber in a 110-37 vote after representatives tacked on several amendments, including one that seeks to define "sex." The measure needs final approval from the House before it could be considered in the Senate.

At times, the debate over the bill appeared to veer into one of the most contentious topics this session at the Capitol: gender identity. In the Senate, Lt. Gov. Dan Patrick has prioritized a “bathroom bill” that would require transgender people to use the restroom in some places that matches their "biological sex."

On Wednesday, state Rep. Tony Tinderholt, R-Arlington, successfully amended the ride-hailing bill to define “sex” as the “physical condition of being male or female.” The amendment, which passed 90-52, drew some concern from Democrats, who questioned whether it was a way to exclude a certain group.

“I can assure you that it is not my intent,” Paddie said, adding that he accepted the amendment because he views it as “further defining something that’s already defined.”

HB 100 would require ride-hailing companies to have a permit from the Texas Department of Licensing and Regulation and pay an annual fee to operate throughout the state. It also calls for companies to perform local, state and national criminal background checks on drivers annually — which would overridean Austin ordinance.

The primary issue in the ride-hailing services debate is whether companies such as Uber and Lyft should performfingerprint-based background checks, much like many cities require of taxi drivers. After Austin implemented such a rule, Uber and Lyft spent millions in a campaign to overturn it — an effort that ultimately failed when voters rejected a ballot proposition on the issue in May. After the vote, both companies immediately suspended services in the city, and the resulting ride-hailing vacuum attracted several start-up ride-hailing apps to Austin, all of which require their drivers to be fingerprinted.

While Uber has left other Texas cities over fingerprint requirements, including Corpus Christi and Galveston, the company continues to operate in Houston, the state's biggest city, even though city regulations there still require drivers to be fingerprinted.

Lyft spokeswoman Chelsea Harrison told The Texas Tribune on Tuesday that her company also backed enacting a statewide system.

“There are a number of cities and counties very close to each other, and it would be a very easy thing for a driver to pick up a passenger in one and drop them off in another,” Harrison said. “If each of those municipalities had their own sets of regulations, a driver couldn’t really drive from one to another without making sure they had a different sort of permit.”

However, some members — including state Reps. Yvonne Davis, D-Dallas, and Carol Alvarado, D-Houston — defended local measures that require fingerprint background checks.

Allowing fingerprint background checks “gives local control issues back to local control authorities that also have responsibility to the citizens they represent,” Davis said.

Andy Tryba, the CEO of RideAustin — a nonprofit rideshare service that launched after Uber and Lyft left Austin — said the company respects lawmakers' ability to overrule Austin voters, but "we believe the local Austin community is the best to set local Austin rules."

State Rep. Matt Rinaldi, R-Irving, expressed concerns about the potential impact on the traditional taxicab industry. Under HB 100, cars used for ride-hailing services could not be used for taxi services. Rinaldi proposed a failed amendment that he said would allow taxis to better compete with digital ride-hailing companies.

Disclosure: Uber and Lyft have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.

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